Bread sales continue to fall at Premier

31 October, 2013

ByGeorgi Gyton

Sales in Premier Foods’ Bread business are down 1.5% year-on-year, for the three months to 30 September 2013.

In the group’s latest interim management statement, announced today (31 October), the drop in sales, which excludes milling and the exit of a ‘high cost to serve’ contract in April 2013, “reflected a slower start to the quarter as a result of the hotter July weather”.

However, Premier said performance picked up over the quarter, with the bread business starting to benefit from “substantial increases in space and distribution” across the larger supermarket and convenience formats of its major customers.

This year has seen the business undergo a major restructuring programme, which has involved the closure of three of its bakeries, two mills and a significantly reconfigured logistics network, said Premier.

The Greenford bakery closed in the third quarter and production at the Barry Mill finished in October. Restructuring costs are due to come in at £28m for the full year.

Sales within its milling division increased 15.1% in the quarter, which the firm said was largely reflective of the higher pricing compared to the same period last year.

Total underlying sales for the group were down 3.2% to £283m, with its Grocery Power Brands seeing a 2% uplift in sales in the third quarter - an increase of 3.3% for the year-to-date.

Gavin Darby, chief executive, Premier Foods, said: “We continue to make good progress against our strategic priorities supporting our category-based approach. We have grown our Grocery Power Brands for a further quarter, completed a major restructuring of our bread supply chain and our plans to reduce complexity across the business remain on track.”